FMCG demand has improved across rural and urban markets: ITC CMD

The ITC chief attributed the recovery in FMCG demand to GST rationalisation, income tax relief and other government measures, while cautioning over West Asia and El Niño risks

Government measures, including the rationalisation of goods and services tax (GST) rates and income tax relief, have led to an improvement in demand for fast-moving consumer goods (FMCG) products, ITC Chairman and Managing Director (CMD) Sanjiv Puri said on Thursday.

 

Responding to shareholder queries on the FMCG business at the company's annual general meeting (AGM), Puri said that following a series of government measures, including the rationalisation of GST rates, income tax relief, and other initiatives, demand has improved across both rural and urban markets. “This reflected in our fourth-quarter results also. And that is the sentiment that we are seeing now,” he said.

 

However, Puri cautioned that key monitorables like developments in West Asia, their impact on inflation, and El Nino have the potential to fuel price rise and possibly cause rural distress.

 

Responding to a query on Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins in its FMCG business, Puri said margins are improving and will continue to do so over time.

 

“The idea is not merely to be number-one FMCG company only in terms of size. We want to be there in all financial metrics, not only in financial metrics, but very importantly, in terms of serving the customer by having the best quality products and creating value for all stakeholders,” he said.

 

ITC has a portfolio of over 30 FMCG brands, representing an annual consumer spend of nearly ₹37,000 crore. Earlier in his speech, Puri said that the Indian FMCG market is poised for significant expansion, with ITC’s addressable market estimated at around ₹8 trillion by 2035, pointing to the immense headroom to grow.